Many magazine publishers are looking for other means of deliver aside from the postal service

Many magazine publishers are looking for other means of deliver aside from the postal service
From FOLIO, July 1st, 2001

ORIGINAL TITLE: Publishers Take Another Look At Private Delivery. FULLTEXT: Jenkins, Caroline After being hit with back-to-back postal rate hikes, publishers are exploring
alternate delivery options as a way to sidestep the USPS. Still reeling from the May 8th announcement that postal rates are going up
another 2.6 percent this month, publishers are taking a hard look at delivery
options that would allow them to bypass the United States Postal Service.
Publishers say they are considering a wide spectrum of options including using
private transportation companies and joining together with other mailers. Some
publishers, however, are quick to point out that alternate delivery tactics
have been tried before, and have failed miserably. Leading the charge for change is the Magazine Publishers of America. After a
$10 million lobbying and public relations blitz that unsuccessfully sought to
keep postal rates under control, the MPA is furious over the latest rate hike.
Rita Cohen, senior vice president of legislative and regulatory affairs for
the MPA, says that her organization, as well as the industry as a whole, is
fed up with the USPS. Its chief inefficiencies, she says, are linked primarily
to mail processing and transportation–and in both areas, private companies
could easily pick up the slack. Because of this, the MPA is "seriously
exploring other options)" she says. "We're looking to expand on existing projects," Cohen explains. "We're talking
to some of the transportation companies and printers and seeing if maybe we
can band together with mailers somehow. It may be a little early on for this,
but a lot of people are looking into it." Randall Publishing is an example of one publishing company that has, in part,
already taken matters into its own hands. The Tuscaloosa, Alabama-based
publisher of Overdrive and Trucking Co. distributes its
transportation-industry titles via 16-wheelers to about 1,700 truck locations
across the country. In an effort to save even more money, the company also
hauls competing magazines. Doing so, says president and COO Mike Reilly, has
made such delivery "almost a break-even system." He adds, "If the Postal Service continues to implement rate increases that
outpace inflation, it's just a matter of time before the whole industry finds
a better way to do things. For a lot of magazine publishers, the Postal
Service is their most unappreciative partner. Most businesses wouldn't put up
with that from any company–it's almost insulting." Been there, done that This isn't the first time publishers have threatened to pull business from the
Postal Service. In fact, alternate delivery actually got some traction about a
decade ago when a number of private delivery companies sprang up around the
country and began offering magazine delivery services in select pockets across
the country. These companies helped distribute magazines in high-density
subscriber areas much like a paperboy would-by carting magazines, usually
wrapped in plastic or polybagged with other materials, door to door. However, a postal rate reclassification case in 1996 substantially reduced
postal rates for larger titles and encouraged many publishers who were using
these companies to turn back to the Postal Service. The two leading players in
the market, Alternate Postal Delivery (APD) and Publishers Express, were
forced to change their focus to advertising, and to fold, respectively. Now some of the more vocal Postal Service opponents are rallying for the
defunct companies to make a comeback. "We have received many inquiries by
publishers wondering if we would be participating in this market again," says
Philip Miller, chairman and CEO of Alternate Marketing Networks (formerly
APD), which at its peak handled about 50 titles in 30 markets. "As we said in
the nineties, and we still say now, if magazines are truly committed to a
long-term plan, then we are always interested in that business." Miller adds,
however, that the company is not interested in functioning solely as a
"postal-rate increase deterrent." Others, however, aren't banking on the resurrection of alternate delivery
services just yet. The alternate delivery companies that experienced fallouts
in the last decade simply did not make money on magazine distribution, says
David Straus, postal counsel to American Business Media. They never got enough
"ride-along" advertising to put them in the black. "I don't see alternate
delivery happening again in the near future," he says. "My guess is that most
of the companies that have tried the model already are reluctant to try it
again." Jim O'Brien, who is now Time Inc.'s director of distribution and postal
affairs but was formerly the CEO of Publishers Express, says alternate
delivery doesn't stand a chance until private companies can gain access to
mailboxes. (Mailboxes are the property of the U.S. government and therefore
cannot be used by any service other than the USPS.) "And it will be years
until that kind of postal reform happens," he says. "All the talk of alternate
delivery now–that's purely a tactical thing, a knee-jerk reaction to rising
postal rates." ISSN 0046-4333; Issue 9; Volume 30; Page 18 Copyright 2001 INTERTEC Publishing Corporation (c) 2001 Resp. DB Svcs. All rts. reserv.
$$FOLIO, 01st July 2001